Martin Bell: The BBC's no place for fat cats. We should stop feeding them cream

Auntie is not a business, she's a public service. Which is why the big bonuses are wrong

No wonder the BBC governors launched their annual report without fanfare and almost by stealth. The professional predators in a largely hostile press would have jumped all over them, whatever the results of the corporation's self-audit.

On past performance there are two alternative scenarios. One – the usual model, promoted by those with competing commercial interests – is that the BBC is going to hell in a hand-basket, losing viewers and listeners apace to its sharper rivals, and no longer delivering value for money to the licence-payers. This scenario sees it as an end-of-the-pier show, doomed to early closure amid floods of crocodile tears. The other – this year's version – is that the corporation is altogether too successful for its own good (and ours), that it is sitting securely on a replenishable pot of gold as the advertising revenues of the ITV channels dry up, and is enjoying the benefits of unfair cross-promotion across its empire of broadcasting, publishing and internet services.

Some of the criticisms come from competitors who are no slouches in the marketplace themselves, and whose own cross- promotion has been shameless: when did The Sun have anything but praise for the various stars that shine or flicker (most of them rather expensively) in Rupert Murdoch's Sky?

The BBC is a durable institution. It has had to be, to survive 12 years of Margaret Thatcher's regime and eight of John Birt's. Margaret Thatcher's intentions towards public service broadcasting were not benign, although perversely it was to her friends in ITV that she eventually wielded the axe. John Birt was a communicator who couldn't communicate even to his own staff. His monument was a Broadcasting House that seems to have more consultants than broadcasters under its roof. Some of what he did had to be undone by his successor. That was the point of Greg Dyke's "cut the crap" campaign. Too much blue-skies thinking means stormy weather for the ordinary rank and file.

Things don't always go from bad to worse, but sometimes from bad to not-so-bad, and even to downright encouraging. I worked for the BBC for half my life, and cannot remember in all that time that it was ever not in a state of turmoil and crisis – until now. The turmoil and crisis have passed. There is a new confidence about the place. In Greg Dyke it has its most charismatic and capable director general since Sir Hugh Greene in the 1960s.

In a job where it is easy to take the wrong decisions he has taken some notably right ones. He was right – long before everyone else – in deciding not to overpay for TV rights to league football. He was right to seize the moment of the Queen's Jubilee to become the indispensable national broadcaster, and host the royal concerts. He was right to invest in quality with a ratings edge: anyone who saw Albert Finney and Vanessa Redgrave in The Gathering Storm (historically oversimplified but artistically brilliant) must rejoice that such television drama, however rare and exceptional, is still possible. Do you remember when ITV used to do it? But that was a while ago, before the accountants took it over.

I hope that I have earned the right to sound a few warnings at a time of such prosperity. One of them is symbolised by the four-letter word most dreaded in the BBC corridors – Oryx. The misreporting of an African mining company's affairs on BBC television last autumn – mistakenly tying it to Osama bin Laden's terrorist network – threatens the corporation with the biggest libel bill in its history. Was it a one-of-a-kind editorial lapse, or part of a wider pattern of indiscipline? I suspect the latter. The BBC editorial hierarchy, which used to be staffed by hard-faced characters who learnt their craft on the Manchester Evening Chronicle and the Belfast Northern Whig, was replaced over the years by a regime more concerned with graphics than with facts.

The dumbing down is of serious concern to friends of the BBC. It started in news, but is threatening to spread to the coverage of politics. The evening news at six o'clock has been transformed in short order from a serious news programme to a sort of marionette show. I was talking last week to Michael Brunson, ITN's distinguished former political editor. He described it as "buttock-clenchingly" dreadful. But then, he always did do understatement. There will always be errors of judgement, and Jeremy Paxman's overzealous questioning of Charles Kennedy last week falls into that category. But systematic dumbing down is something else.

Some things won't change whether the BBC dumbs down or wises up. The Daily Mail will wail and flail against it. It must be hard to run a newspaper day after day in such a state of constant apoplexy. The mystery is why the BBC should hand the paper such a constant supply of sticks with which to beat it. The colour of Peter Sissons's tie the evening he announced the Queen Mother's death was a small but significant example. It wasn't Peter's fault, but someone in the newsroom that day suffered a common-sense bypass.

Far more serious is the issue of bonuses to the corporation's most senior managers. At a time when out-of-control capitalism is increasingly discredited for its dodgy balance sheets, unearned incentives and golden handshakes for under-performing executives, the BBC throws more than £1m at its senior managers to bribe them to stay at their posts. They are public service broadcasters. They are already well paid. If they need to be bribed they shouldn't be there in the first place.

Let us take the example of Mark Byford, whom I know of old. He is now director of the BBC World Service, but once he was a down-table sub on the home news desk assigning reporters to cover floods and court cases. He is a public service broadcaster through and through. On top of a salary of £211,000, he neither needs nor deserves his bonus of £69,000 or benefits of £14,000. If he finds them burdensome, as well he might, he can always divert them to a suitable good cause. I recommend Unicef or the Jubilee Appeal of the British Commonwealth Ex-services League.

The BBC is not a business. It is a public service. It is also a family, to which we belong as viewers, listeners and licence-fee payers. It is ours in a sense that commercial TV and radio are not. We have a share and a stake in it. The members of the family include the public sector workers, school cleaners, classroom assistants and others who went on strike last week living on the poverty line, yet paying the poll tax of the licence fee just like everyone else. What sort of a signal does it send to them that the head of the family, the already wealthy director general, should be paid twice as much as the Prime Minister?

There is a failure of understanding here and a lack of common sense. To stop it falling into these elephant traps, I believe that the BBC needs a friendly spin-doctor with long experience of its ways and a love of its unique character. If pressed, I would agree to take the job, for a limited term and a modest salary – but no bonuses, please, and no benefits.

Martin Bell is a former war reporter for the BBC, and a former independent MP